Enterprise and Regulatory Reform Bill

Debate between Lord Phillips of Sudbury and Baroness Turner of Camden

Wednesday 6th March 2013 Lords Chamber

[Baroness Turner of Camden]

My Lords, Amendment 81 stands in my name. At Second Reading and in Committee, I opposed this clause. The Government have introduced some amendments to the original, but they do not alter the Bill substantially. It would still alter the Heath and Safety at Work Act in a way that is not to the advantage of an injured worker. Section 47(2) of the Act says:

“Breach of a duty imposed by health and safety regulations shall, so far as it causes damage, be actionable except in so far as the regulations provide otherwise”.

In practice, I am advised by the Association of Personal Injury Lawyers, to which reference has already been made, that this means that if a worker is injured and can prove than an employer has breached a statutory duty, he is entitled to claim compensation. This is the basis upon which many workplace injury cases are usually brought.

The law is clear and well understood. It is the basis on which health and safety legislation has been drafted and passed by Parliament. This is the provision which the Government seek to alter. Without this provision, the injured person would be obliged to rely on the law of negligence, which would be much more difficult. Take the case where a worker has been fatally injured after working with faulty equipment. At present, the family need only prove that there had been breaches of statutory regulation in order to claim compensation. Under the provisions of the Bill, the family would have to go much further and prove that the employer knew that the equipment was faulty and did nothing about it. That would be much more difficult than proving that regulations in place to protect the worker had been breached.

According to the Government’s own figures, the provisions in this clause will affect 70,000 cases in England, Wales and Scotland. That is quite a number of injured workers. There are many industries—construction is one—which are inherently dangerous. I urge noble Lords to look at London: it has masses of construction sites, full of scaffolding and workers working on them. The workers who regularly endanger their safety on these sites deserve proper protection. If the Government are really concerned about safety, they should strengthen the HSE instead of cutting resources and thus cutting HSE inspections, which are so necessary to maintain health and safety at work.

This clause, if enacted, will encourage employers to abnegate their responsibilities and rogue employers will get away with it. What about insurance? Employers are expected to have employers’ liability cover. It is fairly clear that insurance premiums will increase as a result of this legislation. Do the Government really believe some of the assertions in the trade press that we are becoming a compensation culture with many unjustified claims? I do not think so.

I once worked in the claims department of a large insurance company. Injured workers then had quite a tough time sometimes getting adequate compensation for their injuries. I thought at the time that they needed representation in order to get justice. Unions, of course, provide a skilled service for their members in such situations; my own union has a good and important legal department. However, not everyone is in a union. Even now, workers individually sometimes have difficulty in securing compensation. With this clause enacted in legislation, it will be much worse: the burden of health and safety will be transferred from the shoulders of well resourced employers to vulnerable workers, which is unjust and unfair. It takes the law on workplace safety back to Victorian times, beyond the landmark 1898 law, under which it became possible to claim compensation where employers had breached their statutory duty.

I oppose this clause; it is unfair and unjust and in the end will cost the taxpayer much more in support for injured workers unable to achieve compensation. I am opposing it because I want to send a message to the Government that they should not attempt to interfere with established procedures which have served people well and are respected. They should not attempt to do this, and therefore I oppose the clause completely.

[Lord Phillips of Sudbury]

My Lords, I suggest to the Minister that there is a lifeline to the Government in this group of amendments, particularly Amendment 80B in the names of the noble Lords, Lord McKenzie and Lord Wigley. It requires the Secretary of State to set up an independent panel to carry out a review of what will become Section 62. I agree with all that has been said so far in this debate; in particular, I think the Government would be very wise to accede to the proposal for the independent panel because there can be few provisions in our whole legislation that are more complex than Clause 62 and the multitudinous amendments that it makes to Section 57 of the Health and Safety at Work etc. Act.

I also draw to the Minister’s attention—if it needs drawing, and I am pretty sure it does not—that the litigation that could flow from Clause 62 as it stands could be formidable, not least in terms of European law. The impact of the law of the European Union in this area of life is very considerable indeed. Professor Löfstedt, in his 2011 review, reported that there were more than 200 health and safety regulations in this country that were affected by EU law. As we all know, where there is a clash, EU law will prevail over domestic law.

The impact on employees of this change in the law could be different from the one that the Government are currently arguing on. It is perfectly certain that if you take away absolute liability for breach of statutory duties and leave it with the common law of negligence, you are, as night follows day, encouraging irresponsible employers—and there are a few, I am afraid—to take risks that will redound to the disadvantage of their employees.

As has already been said this afternoon, suing in this area of law can be extraordinarily difficult. I should have first declared my interest as a solicitor. My firm, Bates Wells and Braithwaite, does a considerable amount of this type of work, as I also have in my professional life. It can be formidably difficult for an injured employee to secure redress from an obdurate employer who is willing to string out the whole business, force the employee into court, and also force him or her into the hands of the no-win no-fee system, which itself has many drawbacks.

I sincerely hope, therefore that the Government will listen to what is being said this afternoon and will take a prudent and practical course that will not hold back this legislation for long, because Amendment 80B sets a time limit for the report of the panel. I hope they will also address to some extent the failing of the Professor Löfstedt review to engage in the sort of consultation that I believe in the view of any Member of this House should have been undertaken prior to the publication of the outcome of that review. I hope, for all those reasons and many others which I hope we will hear, the Government will take the proper course.

Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between Lord Phillips of Sudbury and Baroness Turner of Camden

Monday 30th January 2012 Lords Chamber

[Lord Phillips of Sudbury]

I support my noble friend. My name is on most of the amendments in his name, although not Amendment 137D. I commend him on the clarity with which he spoke to what is an extremely complex set of issues. I wonder whether putting 30 technical amendments in a single group is really an efficacious way of legislating. I am bound to say that the background to these intensely complex practical and theoretical issues does not seem to have been adequately prepared. I endeavoured on day five of Committee to move an amendment calling for a review of clinical negligence cases, which are in a special class of sophistication of their own, and I hope to move it again on Report. I hope that the Minister will not mind my saying that I believe that there has been insufficient preparation for our debates on those matters.

I add only a couple of facts to the underlay to the group spoken to by my noble friend Lord Thomas of Gresford. The position in respect of claims and litigation generally is a mess, let us make no bones about it. It is in a fiendish mess. I speak as one who has always been deeply concerned about the whole concept of conditional fees, which seem to me to be in permanent danger of undermining the professionalism of lawyers, because they have a deep conflict of interest when acting on a conditional fee basis vis-à-vis both their clients and their professional obligations. That is where we are, and perhaps one day we will consider how other countries deal with the problem of how to fund bringing cases to law. Perhaps Germany would be a good example, where the whole field of costs insurance is infinitely further developed than it is here and seems to provide their citizens with a rough equality of access to justice that we no longer have with the progressive dismantling of the legal aid scheme.

To undermine the points made by my noble friend Lord Thomas, one fact struck me forcefully. According to a general insurer from whom the Ministry of Justice has obtained statistics in preparation for the Bill, costs as a proportion of the damages have risen from one half in 1999—whatever the client got by way of damages, the costs were roughly one half—to being roughly equivalent by 2004 and costs now exceed damages by 50 per cent. In the space of just over 10 years, that huge swing in the division of spoils between the lawyers and the insurers on the one hand and a client on the other has taken place. That must give rise to intense concern on the part of anyone and everyone. As I said, I think that the amendments in the group in the name of my noble friend Lord Thomas to which my name is attached improve things a bit, but we should not deceive ourselves that we will end up with fair access to justice.

[Baroness Turner of Camden]

I am not a lawyer, and this is a very complicated set of amendments in a single group. My concern arises because for many years I was a trade union official with responsibility for the legal cases service that we provide to our members. My concern, and that of the TUC, is that the Bill changes the balance away from people who are poor who have had an accident at work and want to seek compensation for their injuries. It has destroyed the balance, as they see it, between the wrongdoer and the injury victim, denying claimants access to the courts and with the money taken from them simply serving as a windfall for negligence defendants and sometimes for their insurers. Even if representation can be obtained, many on a low or middle income may not claim because they are unable to fund disbursements upfront or because of a general feeling regarding the costs, or the risk of the costs, involved. Trade unions collectively assist up to 150,000 personal injury claimants a year. There is a concern that their ability to look after their members will be impacted by the Bill, and in particular by Clauses 43 and 45, which we are currently discussing with this group of amendments.

As has already been explained, back in 1999 mechanisms were put in place to ensure that all reasonable legal costs could be claimed by a successful claimant from the negligent party to protect access to justice, particularly for those on a low or modest income, and to protect claimants’ entitlement to their compensation in full. Such costs include success fees and “after the event”, or ATE, legal insurance. In our opinion, Clauses 43 and 45 would probably reverse that position, destroying injured claimants’ rights.

Clause 43 stops recoverable success fees. Currently, claimants can find lawyers to take on their cases on a no-win no-fee basis using a conditional fee arrangement because the lawyer is paid a success fee. This is an additional cost paid in successful cases to cover the risk of running a whole basket of claims, some of which will be lost. It is the recoverability of this success fee from the insurer that the clause will ban. Instead, the claimant might have to pay up to 25 per cent of their damages to their lawyer as a success fee—if they can find a lawyer to take the case. As Jackson knows—we have been talking about the Jackson report because it is on his recommendations that a lot of this legislation is based—this will harm claimants, and he proposed an increase in damages for the injury alone of 10 per cent to compensate. However, this will not work. Those pursuing employer liability claims will lose out, and this uplift may prove largely unnecessary if the Bill relates only to RTA claims. We are concerned not about that but about accidents at work in this particular briefing.

So far as concerns accidents at work and industrial injury, there is a further concern that if this legislation takes effect there will be a reduction in the number of compensation cases that can be pursued, and that that in turn will have an effect on safety at work, health and safety legislation and so on. That is another impact that this legislation will have on compensation for injuries that workers may sustain in their employment.

Clause 45, at the stroke of a pen, stops a claimant recovering the cost of ATE insurance to cover the risk of paying a defendant’s costs or disbursement. Without ATE, many claimants will not be able to take the risk other than in very straightforward cases.

For those reasons, those of us who are concerned with trade union cases and with work injuries and so on are worried about the impact that this legislation, if not amended, will have on the possibility of people injured at work being able successfully to pursue compensation cases. The Government sometimes seem determined to prevent individuals who feel that they need compensation pursuing their cases. I sometimes think that they have been taken in by all the publicity in recent years about our becoming a compensation culture. I do not think that that is true at all. It is obviously true that many people feel that, if they are injured at work or through somebody else’s negligence, they have a right to claim compensation for their injury and they therefore looks for means to secure that compensation. Sometimes they go to a union if they belong to one, or they may go to other organisations that provide advice and support to individuals. Those individuals will not feel able to do so if there is a risk that they will not get their case taken, or will be landed with fees that they have to pay themselves because they will not get full recovery, having had to pay the compensation success fee to the lawyer involved.

That is terribly unfair, and I hope that during the passage of this Bill we will be able to table amendments that will deal with some of those concerns. Some of the amendments in this group will deal with the concerns that I have voiced this afternoon. They were expressed previously when we had Second Reading and I do not want to repeat everything that was said then, but I want to emphasise that I am talking about people who have very little money. When they are injured at work, often the compensation is no more than £3,000, which may not appear to be a very large sum of money, but to somebody working as a cleaner, it is an enormous sum. Certainly, it is not a trivial amount. People with small claims, who feel that they have been injured and are entitled to compensation for their injuries, may have doubts about whether they can proceed, and they will not find people willing to take up their case. That would be a great pity; it would block people’s access to justice. I thought that in any reform, we should be concerned with improving access to justice. The Bill, especially in these clauses, does not do that. I hope that we can amend them during our discussions.

Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between Lord Phillips of Sudbury and Baroness Turner of Camden

Tuesday 10th January 2012 Lords Chamber

[Baroness Turner of Camden]

My Lords, I, too, support the amendment, which is about unintended consequences. The Government should be grateful that it has been raised at this stage of debate on the Bill because unintended consequences are often a problem with legislation introduced by the Government. In this case, I have had the benefit of the Law Society’s parliamentary brief, which is excellent and has already been referred to by my noble friend Lord Bach. The Law Society has produced evidence mainly concerned with family welfare and clinical negligence. It points out that this measure is designed to save £239 million, but the unintended extra costs are likely to be £139 million.

Frankly, I am interested in the Bill mainly from the standpoint of a former trade union official. My union, of course, provided advice across a whole range of issues to its members and supported them in the courts where need be. In particular, we were concerned about accidents at work. When we look at accidents at work, we are concerned not only about the physical and actual costs; there is also the question of other serious effects. If the threat of litigation in workplace accidents and diseases were reduced, health and safety at work would be significantly undermined, leading to an increase in avoidable accidents. Without recourse to the courts or with reduced compensation, injury victims would be much more reliant on state welfare and supplementary benefits. That point has been made by the TUC in respect of the possibility of accidents at work and support for them being diminished as a result of the Bill unless we have the examination that has been recommended strongly by a number of speakers and is recommended in the amendment.

I do not know whether the Government feel that individuals who would otherwise be facing the consequences of accidents and so on should put up and shut up. Fortunately, many people are simply not prepared to do that and will seek all sorts of other ways in which their cases can be pursued if they are blocked from following them via the court route. That is not a very good idea either because it can lead to all sorts of other problems for people who feel that they have a case but also feel that their way forward is blocked because they cannot get access to a hearing in court.

For these reasons, it is very important that we get the Government to have a very clear look at what the unintended consequences would be from what they suggest in this Bill. It has been spelt out by a number of speakers in this debate this afternoon and I hope that it will be taken very seriously indeed by the Government.

[Lord Phillips of Sudbury]

I am not sure whether I am speaking for these amendments or against them. I started the day at 3 o’clock our time having breakfast in Doha, and was rather choked when eating my toast when I read in the Gulf Times about the King’s research into the financial effects of parts of this Bill. I am sure that my noble friend the Minister will ponder those extremely hard.

I wanted to say a brief word about the important matter raised by the noble Baronesses, Lady Lister and Lady Howarth, and many others, of the prospect of many more of our fellow citizens having to represent themselves before courts and tribunals. I started life as a young lawyer in a country general practice, spending a great deal of my time in magistrates’ courts. My principal was part-time clerk to five country courts. All I can say is that you really do not need a pre-impact assessment of the effect on a would-be proponent or accused, whether before a magistrates’ court or a tribunal. You do not need to do any research to know the effect of having to go into battle without any legal help. That is particularly acute, obviously, with less confident and articulate people, but it is not confined to them. My experience is that you never know how many people are deterred from taking or defending proceedings because they cannot have legal assistance, because of course they just do not tip up; they do not pursue their claim or defend the claim made against them.

I know that my noble friend has thought long and hard about this and has a very difficult task in dealing with parts of the Bill, but the other thing that is easily forgotten is that if someone thinks that they are going to be opposed on the other side by a lawyer, that really is a finisher for the course that they adopt on those proceedings. I make those points merely to try to help the deliberations of the House.